Transcripts For CNBC Worldwide Exchange 20150519

They rise for 20 straight months with all major markets showing growth. Asia markets take their queue from a record close on wall street and the promise of chinese reforms. The shanghai ending with the nikkei at a three week high. Welcome lets get straight to markets and the euro in particular which was soft yesterday but markedly soft today. Took a big leg down about half an hour or so. You can see its 1. 118. Down 1. 2 . This came after the ecb board member expressed concerns about the repettive of european bond sell off. He cited extreme volatility and reduced liquidity and added it will be front loaded ahead of the summer lull. What has this done to equities . They moved in the opposite direction as you can see. Across the board equities are looking strong. Ftse 100 lagging. Its up. 5 where as Continental Europe is up significantly. Italy up 1. 3 . Lets have a quick look at bonds as well which have also seen a little bit of a move. We can see the bond yields slide a little bit. Back below 0. 6. We have julia on set with us as well. It seems like the ecb is ahead again. What are they trying to achieve here . They seem to have done a couple of things. The Euro Weakness is one in particular. When hes talking about the concerns in the volatility of the market the ecb would like to talk those down. It raises all the usual questions about the omt and the things we have seen in the past and one of the other things 60 billion jurors rows worth of bond supply over the next four weeks. If you were the ecb wouldnt you want to adjust your purchases in order to smooth some of those buyings. The timing of these comments are interesting because we know investors have been falling out of low with the qe trades. Short the euro and go long european equities. Those trades have been unwound so perhaps these comments are coming to basically put those trades into effect for the longterm. I also think we have been trying to workout what has been the cause for the sell off weve seen over the last couple of months and that question of is it the ecb, qe bubble burst something id say this now underlines that that was the reason for the move. Look at the correlation were seeing. Equities and bonds going up together. It does highlight the driving force behind markets for the early part of the year and over the last couple of months where that has been unwinding. Three weeks ago we were talking about the scarcity of the bonds and concerns that the ecb wouldnt be able to make the purchases it wanted to. Imagine if we got to a situation where liquidity is lower and they didnt hit their purchase targets. Imagine the conversations we would be having there and freaking out about the scarcity of bonds. I think this is a smart move for a few reasons. Reassuring comments. European equities sharply higher in todays trade. I want to point your attention to the greek bond market. These discussions pertaining to greeces debt situation, to the imf as well as tread creditors, those talks continue to intensify and in response youre seeing the greek ten year at 11. 3 . Yield on the 5 year at 16. 5. The three year at 18. 2 . A number of greek officials expressed confidence that the country can come to a deal with its International Creditors in the coming days. Last night the finance minister insisted a default and return to the dragma were not an option but athens would reject any agreement it considered to be nonviable. Translator there is no one in our government no one in our government that will sign an agreement that wont forsee the restructuring of debt. It comes after the greek Prime Minister admitted that the country is in a state of financial strangulation. Greece is unlikely to be able to pay its upcoming debt obligations unless the next bailout money is released. However a group from the far left of the ruling syriza party called for a rupture with creditors. In a text published on a website and to be discussed today they say syriza cant become a party of austerity and this government cannot implemented a memorandum. Julia on one sense we have him suggesting on television that were getting close to a deal where as people in his own party suggesting were far from it. Scared we are pushing toward a deal and they dont like what it looks like. Are you crossing red lines we keep talking about. Pension reforms and deregulation of the labor market but we always knew it was a possibility here. When i spoke to him in february i asked him about this and the risk to passing policy and he said look they always voted with us and they will again. Will they be able to swing this again this time who knows as far as thats concerned. It does seem like were making progress. I talked about it as walking the red line. Some of the reforms they talked about suggest theyll scrap early pensions. Were seeing some adjustments to pension reform. I say walking on the red line and not crossing it but the other things is whether there was some negotiating going on to get them a softer deal and that excluded the imf so yet again it seems that we cant get agreement between the creditors over just what greece needs to do here. In the meantime, the hard left faction wants him to take a hard line with creditors. Could these demonstrations were seeing result in a slow down in the negotiations taking place between greek leaders and creditors . Its a good question. I dont think so in a sense. Theres enough that they could vote this through. It could be messy. Who knows what thats going to do to the government afterwards. A lot of them still ruling out the need for a referendum at this stage. That could mean more delays. Will a referendum actually work in their favor. Thats a great question. Whether they rally to him or accuse him of time wasting. We want a better deal. Very difficult to see how they argue. Julia for now, thank you so much. Its not all doom and gloom despite greeces dwindling finances the countrys firms are making pigbig bucks. For more on that visit our website cnbc. Com. Lets have a look at markets and a sea of green behind me. Not small moves. Most of these are up over 1 over 2 indeed. Where are we seeing so much green . The euro has fallen quite sharply today, particularly in the last 45 minutes off the back of the come menls wements we have been talking about. Quick look just to remind you of the moves weve seen. Ftse 100 up only. 5 . Lets dive into the interesting sector and stock moves were talking about today. Auto stocks on the back of european car sales which rose for the 20th straight month. April new car registrations were up by 6. 9 thanks to growth in major European Markets. You can see the moves across all the major european auto makers. Quite significant at the moment. Stefen has the latest on this story. The growth came from countries like spain up 24 . Italy up 16 . The month of april was weaker than the performance in march with almost an 11 growth but it remains the best performance for the car sector in europe and in terms of brands the french car maker was the best performer. Almost a 16 rise. This is due to the Strong Performance of the low cost unit which posted a 15 growth but not only even the renault brand did well last month in france and the rest of europe. For the other prench car maker we had a 2. 5 growth last month. That seems to be a weak performance compared to the rest of europe. Its due to that line which saw a 17 slump excluding this negative impact it grew by 6 in april which is quite good. The company was went through a very difficult period in the last three to four years and that seems to confirm the gradual recovery not only on the french markets. All in all good performance in europe and very good performance for renault which is now the Fastest Growing car maker in europe. Share price is up 3. 3 . Thank you for that. Thats what is happening in the markets in europe. Lets get out to sri for an update in asia. Yeah. That seems to be soaring up sentiment from your neck of the woods and off fears of a greek debt default. I wanted to talk about the shanghai market. A blistering rally at the close. Up by 3. 2 . Remember what we saw yesterday. Remember the message yesterday. Market was at a one week low because there was a sense that we could see this wave of new ipo issuance. We certainly din get that playing out today. What we did get was a little more clarity about the Reform Program and as you would expect theres a big emphasis on Capital Market liberalization. The markets like what had they saw. That encouraged a loss of buying of the blue chip stocks. Especially the banks as well. That propelled the markets higher. Where else has the chinese public got to put their money aside from the stock market and property as well. So its looking a little bit bubblish, yes, market valuations are still below the 2,007 peaks. Positive sentiment spilling over. Sri for now, thank you so much. Coming up on Worldwide Exchange potus, president Obama Joining twitter taking part with bill clinton. Well bring you that. Plus we break down the u. K. Telecoms results after the break. Plus overalls are coming back. Retailers try to make them fashionable again but we hear from one analyst that says the trend is just another sign of desperation. Thats coming up. Thats coming up. Shares in the red after quarterly net profit fell last year. They posted full year pretax profit over 1 billion pounds in 2014. Vodafone said stabilization in europe and increasing demand gave a boost to sales. Group sales are rising 10 in the year but the stock is down. Why do you think that is . The uncertainty ahead. You know, we are excited because. 1 organic growth in the last quarter is a symptom of the industry i think and vodafone is claiming they will have organic growth Going Forward but looking at the market i think thats a bit uncertain. I think we can predict maybe the next two or three quarters of some growth but beyond that we have still the competition between operators that is tough. We have the regulators and the players that still post tough competition. Interesting you say its still a very challenging outlook but the shares havent done much anyway. So these results slightly better than last set. Clearly not performing well. Of all the challenges that it faces is the competition in that sector still the main one. Particularly the consolidation in the u. K. Market. We only have a theory that three player markets are more theory than four player markets. But thats only a theory. In austria we could see that prices were increasing a bit. Thats a sign that it can improve but in finnland we had a three player market for a long period of time and thats still very tough price competition. We dont know if a three player market is better for operators. This deal between bt and ee how much of a threat is it to vodafone that theyll have this quadplay offering and being able to offer domestic broadband as well as video which they dont have the similar offering of. The trend there is quite clear. Most operators have figured out that they like to be quadplay operators. That would be the dominant player in this market. Vodafone has made acquisitions put in a position to be the operator but theyre only halfway there. 25 of their revenues are coming from fixed broadband. So if they wanltd to be at to be fully integrated they need to invest more in content. The animal spirits are alive in the Corporate Board room. What other tie ups do you see in this sector . This is a market being more comod tiezed year by year. We have ip all over the place. Beyond that we have 4g basically where every we move outdoors but that also means that the similarities between the offering of the operators are similar. So therefore price would be a very important weapon in competition and beyond that you have players that are, you know posing a threat to existing Business Models. You have whats app, you have skype, you have spotify and a number of players offering compelling services at the expense of operators. So i think that one key focus for operators is to be very cost conscious and look at you know what is the operational cost of my business and can i be more efficient than i am today. Its fascinating discussion though. Commoditization commoditization. Thats in some ways happening in the cloud industry as well. Utilities. Theyre essentially offering the same services so overtime how do you differentiate your product versus what your competitors are offering . Its a trend well have to continue to watch and what it means for different sectors. Absolutely. Pleasure to have you on. Thank you for joining us on Worldwide Exchange. Now sticking with telecom, at t chair pan and chairman and ceo took the stage in boston. Kayla caught up with him and filed this report. The buzz is over bundling or rather unbundling and whether the end is near for that traditional cable package. We sat down with the ceo of at t Randall Stevenson about his views on that subject. Youre seeing netflix and hulus gain a lot of momentum and its changing not just the tv distributors like verizon or comcast or at t and how we think about the business but effecting how the content developers are thinking about the business. Part of at ts strategy to build the over the top content product rests on the fate of its merger with directv. Its been delayed several times due to new rules over net neutrality. Stevenson told me he is optimistic about the deal but less so on the fate of those rules. We do think that there is general willingness to pass a sustainable path to net neutrality. The only thing certain in these industries is change. The world will look like a very differ place in just a years time. One executive familiar with that is Marissa Mayer presenting a closely watched keynote at this conference on day 2. Okay. Back to European Markets, everything is up as you can see or is it . Lets dive into some of the individual stock stories. Merck down 1. 8 after disappointing First Quarter results. This due to costs associated with the planned acquisition of sigma aldridge. Lets get to annetta with more details on the story. The numbers are disappointing and its the only share here on the German Market side which cant benefit from all the ecb or greece optimism. Let me run you through the numbers. Net profit down 13 . The company is because of financing cost of its biggest acquisition ever in the companys history. Theyre essentially supplying technology and instruments for laboratories for 17 billion u. S. Dollars. The financing cost caused a weighing on the results in the First Quarter but looking at the divisions also there, Health Care Unit is not doing well. They have drugs, like the drug against ms and those blockbuster drugs have suffered a severe blow in the First Quarter. Sales are down 16 where as sales for the cancer drug is down by 6 . Also is they need to invest more money into research for new drugs and new other drugs in general because of course they need to renew their pipeline here in the health care sector. The outlook 2015 really looks very good but looking through the side effects of the lower euro or strong us. Dollar where they say theyre benefitting from theyre looking into flat sales also for 2015. Thats the reason why the stocks are down despite the very Friendly Market environment. For that back to you. Annetta thank you very much. Unilever up 1. 3 . The cfo is leaving the company after five years. It was his decision and his replacement has been named. Markets are positive across the board in europe today but he is leaving and unilever is up today. Now dcc sharply higher. 10. 5 to the green after an 8 rise in full year pretax profit. The Business Support Services proposed a share placing and upgraded its profit and adjusted eps outlook and aveva is down 3. 25 after posting a 19 drop in full year net profit. This due to strength in sterling and weaker demand. We talk to lots of our competitors about partnering with them all the time but im not going to Start Talking to you about each individual case. Are you talking to any of those three companies i mentioned about a possible take over of your company. Absolutely not. Still to come on Worldwide Exchange following in the euro zones footsteps . U. K. Inflation is expected to turn negative for the first time in 5 years. We bring you the data coming up next. P next. The euro is on the slide after the ecb board member says the central bank will front load its bond purchases over the summer due to liquidity concerns. Concerns also weighing on a single currency. A chorus insists a deal with International Leaders is imminent but policy makers continue to suggest otherwise. In the fast lane european auto stocks drive higher as registrations show growth. Asian markets take their queue from a record close on wall street and promise of chinese reforms. The shanghai composite ending over 3 higher. Japanese nikkei also at a 3 week high. All eyes on the currency markets. The euro weakening further. A reversal of what we have seen this month. The ecb intent on easing financial conditions for europe so the weaker currency environment is seen as favorable and you can see that reflected in the equity market. The European Equity market moving up to the side. If you break down the major movers the xetra dax up almost 2 after losing 2. 5 last week so a rebound in the German Markets. Similar situation the ftse 100 up. 4 . Sterling right now moving lower. Indeed we have got the u. K. Cpi data coming in for april. Minus. 1 year on year. Plus. 2 monthly. So that monthly number actually a bit below expectations. Expected to be about 0. 4 year on year number. We are expecting it to come in at minus 0. 1 . So its negative territory for year on year inflation. Thats cpi for april. Sterling is down 0. 7 which is where it was before the data came out anyway. Lets get a reaction from henry dixon who is with us around the desk from glg. Minus 0. 1 . Are we staring in the face of deflation . I wouldnt worry. There was just a question of when. A big, big component of cpi is food. 18 of the cpi basket is food so regrettable state of affairs that we get a lot of our food imported from europe. I would hesitate to extrapolate this. Its a mathematical uncertainty that youre going to get it in january that could make people sit up. Could be as high as 3 year on year. But you say its a mathematical certainty that well have a strong inflation, positive print by the end of the year and early next year. I say if we lose the base effects of fuel last year oil was about 40 barrel. As we lose that year on year base effect and oil been up maybe 50 or 60 its very very definitely going to feed through into inflationary data that will surprise on the upside and its a question of how much the bond market will take of that. If that comes at a time with global ip growth celebrating it could be improving economies and also inflationary data. If you combine that with Wage Inflation coming through which looks set to be a feature of the second half of this year we could have a threat to the bond market on three fronts. Thats something we have to be careful of. At the face of it you say investors shouldnt be too surprised by the cpi number. Absolutely. If you put a lot of work into it, it shouldnt really surprise people. The year on year is the year on year and if you do put work into it cpi print shouldnt come as a huge surprise to people and from our perspective were very very confident in this. While it might be one or two months what we can be absolutely sure of is fast forwarding six months it will be a different picture indeed. But waking up tomorrow and reading the newspaper and seeing u. K. Inflation falling into negative territory for the First Time Since the year of 1960 could that lead to consumers not spending as much because they are betting on prices falling further and thats not good for the u. K. Economy. I have to say, anglo saxon consumers are very good at spending money in their bank accounts. Its good news that food prices are lower. We have a record disposable income boom in the western world right now and we have a habit of spending it. Maybe others tend to put it under the mattress. Hasnt happened here for a thousand years and i suggest its not going to happen here. You expect rates might rise ahead of general market expectations. Would you be buying sterling on this . No have to say with sterling i think sterling and its dollar is probably to the top of its range against the dollar. I would expect the dollar to assert some strength against it and with the euro now we look at our purchasing power for the First Time Ever the euro sneaked into reasonable value against sterling for a long period of time it looked expensive. Then its the dollar and the euro on the one year view. Lets have a quick look at bonds before that and see what theyre doing off the back of this u. K. Data and of course also moves across the euro zone today and Continental Europe and pan europe. U. K. Yield as you can see 0. 49 on the two year. Ten year at 0. 78 . If we look at the rest of europe. The ten year in germany moves significantly today to 0. 56 . It was above 0. 7 in the middle of last week those comments igniting again the bubbles related to ecb bond buying. Despite the sell off in the monday markets stocks actually moved to the upside. Was another record close for the s p 500 and the dow but meryl lynch is predicting a bleak summer for stocks. Investors will be trapped in a twilight zone. The transition period between the end of quantitative easing and first fed rate hike. That means volatile trading, correlation break downs and flash crashes. Scary. A long list of things to watch out for but whats the best protection against it . Theyre adding cash and gold to your portd foil owe buying a put spread peg links to the s p 500 positioning against a stronger dollar. Lets get back to henry. How do you protect in your portfolio at the moment . What are you looking at to offset these odd bouts of volatility. I want to be clear have no idea what a put spread peg means. For those option traders out there. We think 2thirds of it is expensive so i can come up with a car insurer that makes 2thirds of its return and a third of the profits come from an investment return. A third of the earnings are going to double. These are the types of shares. It plays to financials and inflationary parts of the markets and if you get up the share price of any gold share it is making multidecade multigenerational lows relative to the wider market. We can buy gold shares less than ten time with 20 of the market cap in cash. These are the type of tuns. I would keep it very cheap and very cash backed. Debt will get very expensive and thats all you can do. Pleasingly the errors in the market are cheap. They will benefit from shortterm Interest Rates doubling. Thats really pleasing. Another sector is the banking sector. It hit a 52 week high last night. Having to do with rising expectations of a rate hike from the fed. Where do you see opportunity . We do like the banking sector. Its one of the four sectors being called into massive structure question at the moment. You go to the deposit heavy franchises and theyll benefit very meaningfully. 20 on earnings in some cases and they pick up because a deposit based customer is a loss making event right here for retail banks because they can make no money out of a depositor. One final thought we have the Election Debate and all the rhetoric with that behind us. It seems straight after the newly elected government that all the rhetoric now focuses on productivity. Is that the biggest challenge in the longterm . Probably behind put spread peg is one of these terms i dont really know what productivity means. I talk about Economic Growth and output and the amount of people that people are hiring and they say what are we getting out of that. Productivity is the missing link. It totally follows that the amount of new entrants we get into the employment market theyre not going to be hugely productive. It takes a lot of time to mobilize unemployment from 9 to near 5 . Now were starting to see the tension in the labor market. People should be Getting Better at their jobs. Should be starting Wage Inflation coming through and thats great news but its another factor that calls into question Interest Rates which i dont agree with. Thank you for joining us as ever. A good article in the economist about productivity at britain. I didnt read it. You didnt. I thought thats what you were referring to. Thank you so much henry fund manager at glg. Japans Department Store sales for april jumped compared to the year before. Lets get to the nikkei live for the story. Thank you wilfred. The nikkei 225 has again passed the 20,000 yen threshold closing at 20,026. We saw retail related stocks gain. They rose by 6 and 3 respectively. Half an hour before they closed the nationwide Department Store sales showed an increase year on year. Now Department Stores were hit hard in april 2014 by a consumption tax hike so its no surprise that Department Store sales would eventually mark a rebound from this but theres also two other reasons why sales are up. If you look at the trend of the Japan Economy watchers survey which reflects how individuals feel about the current and future and Economic Outlook it Shows Positive sentiment for the fifth straight month. The other contributing factor is the rise in foreign visitors. The number of visitors wont be announced until tomorrow but its expected to not be far from the result which is an increase of 45 year on year. Its encouraging foreigners to shop in japan. Now the question is whether Department Sales will perform well across the whole country and not just in major cities looking ahead. Thats all from the nikkei. Back to you. Thank you very much. All right. Still to come on this show putting a price on apple. Billionaire investor carl icahn says the stocks valuation is just plain wrong. Well tell you what he thinks after the short break. After the short break. Intensifying talks taking place between greek leaders and International Creditors. Some skepticism as to whether or not progress is being made. Agreements on greek aid will not be taken at the riga summit and talks are still decisive. Agreements will not be taken at the riga summit and talks with institutions at this point are decisive. The euro is gaining a bit of ground against the u. S. Dollar at 111. Still down about 1 against the u. S. Dollar. Robert deniro opened the First Nobu Hotel in the philippines. We caught up with the hospitality ceo and asked them why manila. Its only the second you know but they keep growing. So theyre so nice and smiling and also we can get nice product here so you know its like also my customers they have customers all over the world. What do you think . Should the asia pacific get more hotels . The weather is great. Perfect. Maybe one day we can find a real place to do that. A location in the philippines to open a resort. I want to talk about the Business Model because its in the Hotel Management style. You dont own the properties but you manage and bring the brand to the actual hotel itself. What is the nobu hotel. What does it mean . It means service. And it means food and beverage for us. Because we believe many motels in the room have a nice room and a nice lobby but they dont have maybe the food and beverage that we can provide both in the restaurant and in room service and we thats where we base our concept on. So that would be the difference. Yeah were a food and beverage lead company. Our core business up until 7 years ago was restaurants and it was really the shareholders especially bob that felt that a lot of the hotels that we were in were using nobu as a draw and bob said well why is it that we have so many restaurants around the world. Why cant we do our own hotels. So it was a logical step to do the first one and thats when we came into the company and said look i think if at the end of the day we can involve the right concept within hotels the same as the restaurants and make it like that lets see what happens. A nobu hotel in manila. Now six years in the white house but president obama finally joined twitter on monday. He already has more than 1. 5 million followers. Easy enough for some isnt it . Obama received a welcome message from former president bill clinton and that lead to this interesting exchange. He says welcome to twitter. One question does that user name stay with the office. Asking for a friend. Good question. The handle comes with a house. Know anyone interested in at flotus. Bill clinton is a witty guy. I would expect that. On that note if i may, at potus, he hit 1 million followers in six hours. Where are you . Youve been on twitter now for a coup of months. About nine months. Yeah. Have you reached a million. Nearly there. Almost there. Anyway thanks for that seema. Following this Brilliant Exchange between president of the United States and bill clinton we have been asked you what is the best first tweet you have ever seen on twitter . Join the conversation cnbcwex our twitter handle and personal handles on the screen for you. Ive had a lot at a couple of these. My favorite is from conan obrien and on the day his show was cancelled he tweeted today i interviewed a squirrel in my backyard and then threw to a commercial break. Somebody help me. Hes always a funny man. He is. And its not always better for those vibrant on tv it doesnt always translate to social media. It works for some. Another famous british celebrity when he joined twitter he said im not a twit and thats it. I believe he has a lot of followers. I believe in the u. S. When he was an anchor at cnn he is one we widely followed as a journalist. His current campaigns are about Kevin Peterson and austin wenger. You know them. I absolutely know them. Hes incredibly opinionated and gets an idea in his head and just goes for it. Maybe thats the key to success on twitter. Engaging viewers is being opinionated and witty. Probably why i havent got enough followers so far. This is good advice right . Indeed. Do get in touch with us at cnbcwex. Let us know what the best first ever tweets you have seen over the course of the years. Now lets talk about bitcoin. Theyll launch the Bitcoin Index today. Its the First Exchange calculated and disseminated for bitcoin. Now i think this is interesting because of course bitcoin a lot of speculation as to whether this currency will be able to stay alive for years to come. Its based on a mathematical formula. It eliminates the boundaries that earlier presented individuals as well as Retail Investors from accessing bitcoin because ill tell you from my own experience you need to understand the mathematical formula and need to know how to work the bitcoin payment system. Its not as easy as buying 100 shares of apple or the u. S. Dollar. You have to understand how bitcoin works in order to invest in it but these funds theyre putting together they simplify it and make it easier for the every day person to expose themselves to bit coin. Right. That is a big factor that might encourage some people to come in that its simplified. I wonder whether it also panltsints the top of the market. Everyone can get involved and all of those people enjoyed the earlier run up. It does make it simpler but it also draws attraction or attention to most every day traders that like to look at the underlying earnings and be able to buy it and track those things. Theyre not going to say i can see where the earnings are coming and be able to forecast that. It highlight mrs. Analysis coming on to understand whether this is fundamentally a good thing or not. Maybe theyll open up a new market and be more of a need for Research Analysts and technicians that want to understand the analysis behind bitcoin and follow its 50 Day Moving Average and whatnot to help them understand whether its a viable investment option. I think theyre very interesting because weve seen online payments in general proliferate. The question is will bitcoin tonight to do well. Theres lightcoin and others competing in this space. Interesting one on that front. Want to keep an eye on. Meanwhile, alibaba had a lawsuit brought against the online marketplace by a group of luxury good makers is regrettable. The lawsuit accuses alibaba as being a con dueduit for counterfeit goods. The worlds most valuable company is diaw matticlyramatically undervalued according to carl icahn saying apple is worth twice its current price. In an open letter to ceo tim cook icahn lobbies for a much larger buy back and he says that the tech titan is poised to dominate the television and car markets markets. This is not the first open letter to tim cook and team. Apple did follow up by unveiling a dividend and increasing the amount bought back but this is the biggest dividend player on the s p 500. Absolute terms. Not yield terms. But not in terms of yield. That doesnt matter. It does in terms of their cash balance. You have one that only has a billion market cap but paying much more in dollar terms and the yield is tiny. Apple has done a lot to increase its buy back program and appease Value Investors yet carl icahn never satisfied. Im with icahn on this. I dont necessarily say im with him in terms of the value should be twice of what it is. Thats a bit over the top but they have a huge huge cash balance and i think they could definitely allocate more of it either to a dividend or buy back. If they have projects for that they should definitely spend it. Theres plenty of room for bigger buy back. This is a fast growing tech company. If they want to hold on to the leadership in the tech space they need to allocate more money into rnd innovation. From covering World Congress and other events theres so much competition from the emerging market world. Talking about china, micromax in india these players are gaining a lot of traction in these markets. But that doesnt mean its sustainable. You have to innovate. Youre saying to spend more toward buy backs. Yeah they can definitely allocate a bit more of it. Well go around in circles on that topic but the other thing interesting on his point, he said, you know they can come to the Television Market too. All of our focus is on can the iphone 6 sales sustain. Is the am watch going to be a big mover for them . But apple tv if they revamp it successfully that could be a new area which will dominate all of our ecosystems in the way that the laptop and iphone did. Follow the music space. Theyre widely expected to unveil their streaming service in june. Lets see what announcement we get from that. Great stuff. Thats apple. Before we go to break lets sum up European Markets for you. The big mover today is the euro. Below the 112 handle. It was soft yesterday and about an hour ago it saw a stark move down by 1 . That was after ecb board member expressed concern about the repet repet repetity would be front loaded because of that. Athens sees an eu deal coming soon. Were seeing a lot of volatility volatility. Now were at 11. 2 . So this to me highlights the complexity of these negotiations and really relieving greece of its debt repayments. Quick look at European Markets which are looking very strong. Particularly in Continental Europe. Germany and france up over 2 . After the break, well bring this together and look forward to the u. S. Open. Stay with us on Worldwide Exchange. Exchange. Welcome, everyone. Youre watching Worldwide Exchange. Im seema mody. Here are your headlines from around the world. The euro is on the slide with euro zone inflation data due to hit the wire any second now. Greek concerns weighing on the single currency. A chorus of officials suggests a deal is imminent but eu policy makers continue to suggest otherwise. Banks lineup and downgrade Urban Outfitters as they take a hit in the First Quarter Earnings Report. Thats as the street waits to see what walmart and home depot have in store. Both retail giants reporting before the bell. And we have got euro zone inflation data coming at 0. 2 month on month plus 0. 0 year on year. Now last month the year on year figure was minus 0. 1 so its just come out of negative territory into flatter toir. The figure of 0. 2 was expected. This hasnt really moved the euro dollar. Were significantly lower on the day for the euro dollar and down 1. 1 . It hasnt really moved off the back of this which is largely in line with expectations. Also want to break down the german zew number. 65. 7 versus 68 was the expectation. So slightly lower. The zew says the Financial Market expert sentiment concerning the Economic Development of the euro zone is declining as well. So Current Conditions coming in at 65. 7. Economic sentiment at 41. 9 versus the expectation of 49. So lower than what the street was expecting. You can see the euro slightly higher now. But coming off the lows of the day down about 1 . Good morning to you. Thank you for joining us. Now if we rewind a couple of days weve seen that european qe trade start to unwind bond yields rise and the euro recovers some ground. Part of that is on the expectation of inflationary purposes in europe. Fractional improvement from last month, its not really reinflation is it . It shows the market is ahead of itself in trying to price too much too fast. This is going to be a very very slow process. Part of that was also a sign of success. A sign that the ecb was getting traction and better growth. Youre starting to see oil prices come up faster than expect sod theres a little bit behind that but the pace was un undo. Why did he come out today and make the statements he has which reversed things quite sharply today. Theres two sides. One is you take them at face value that theres a lack of liquidity in july and august and that was the reason they decided to make this change. That being said they could have easily talked this sort of decision on to the back of an ecb website where people might not have noticed it. The fact that it came out in a policy speech means the ecb is not that upset if the market wants to take it for more than it is. But the ecb is buying the exact same number of bonds. Theyll buy more over the next couple of months and less over the summer. The strength that were seeing in the euro down today but still at 111. Very different story than we saw in march at 105. Does this make the Quantitative Easing Program less effective when looking at the real economy across the euro zone . When you look at the longterm stimulus coming from a euro that fell from 140 down to the low levels theres still plenty of positive stimulus coming in. Is there slightly less stimulus because we move from 105 to 110 or 115 range, sure. Is the ecb going to be upset if the euro trades lower, absolutely not. It probably means more for the euro in trying to reinforce investors that rather than unwinding the bond trade youre seeing it on the equity trade. If it supports that side of things it does give you a bit more downside to the euro but means a lot less for bond yields. Would you still buy the exporters here . That benefit from a weak currency environment . I think if youre looking on broad segments within he i wasties thats still a sector within the euro zone getting a tremendous amount of stimulus. Theyre held from the currency as well as from qe. Lets hit the pause button and come back to you in a second. Lets look at the other movers today kicking off with sterile chg is down 0. 7 . 15542. This has been a move off the back of it strong since the election. Although the weakness kicked off at the start of the day. Lets look at European Markets and how theyre responding to the data we just got out on inflation. You can see markets Still Holding on to the green which tells me that investors are still focused on the move were seeing in the currency. A boom for those european stocks, specifically the ones that make most of the revenue outside of europe. The xetra dax up about 1. 8 . Slightly off the highs from earlier this morning but holding on to a gain of 2012 points. Cac 40 up. This is delayed reaction but you can see the greek equity market higher by around 3 and the ftse 100 seeing a gain of 29. Yields had risen along side lots of the qe related trades but we have seen that move back again in the other direction. What makes this interest as good despite the sell off we saw yesterday, stocks went higher. U. S. Stock ending higher with the s p 500 and dow hitting another all time high and record close. The s p tech sector really leading the gains reaching the highest level since november of 2000. A quick check on futures and what you can expect on this tuesday morning. Were indicating another day of gains. At least at this hour the dow up by 45 points. The tech heavy nasdaq, it was tech that lead the markets higher yesterday up 14 points in premarket trade. Richard kelly still here with us from t. D. Securities. Richard i feel like a broken record. But im a data geek and the fact that the s p 500s ratio is much higher than the historical average isnt that a cause for concern . It shows you that were coming from an area where theyre trying to elevate equities. If you look to the normal cycle when youre starting to talk about Central Banks tightening that should be an area where growth is going to fuel equities. If the fed is hiking and the ecb has a stimulus in there you have to expect this is going to be a less beneficial environment for equities overall because you priced a lot of that upside into equities up front. That was part of the job of Central Banks. The American Association of individual investors showed that bullish sentiment dropped 27 . Thats the lowest level in more than two years. Its also a decline over the past 12 weeks so bullish sentiment is decreasing yet stocks are hitting new highs. Wheres the correlation here. It does give you a sense that maybe you shouldnt be as overpositioned in there. Whats also interest as good you have had a tremendous sell off in Interest Rates and fixed income over the last month but you have still seen sentiment hold in well. That gives you a sense that the market doesnt feel the higher Interest Rates are going to put an undo cost on growth and businesses. Thats the positive take. Certainly youre not going to be as overpositioned there if youre still talking about tighter policy. I want to mention the bond market as well. Over the last couple of months we have seen yields pick up globally. Its had contagion across the u. S. And u. K. As well. What would you make of where the spreads are at in terms of u. S. And german bonds . We have probably seen the wides in terms of where you get there. Tactically if we were to see phenomenally stronger u. S. Data out that made it clear the fed was ready to go in september you could have further underperformance of u. S. Fixed income against germany but what you have seen in terms of the start of the reinflation trade is something that has legs and youll start to see a trend compression now over the next 12 months or three years. This is the start of the progress. I want to touch on a groebllobal point. Markets have been driven by quantitative easing over the last couple of years and japan and europe were the latest to join on that front. China is easing as well. How significant is that relative to the european and japanese qe over the last six months . China is still the greatest untreated down side risk to the global economy. So by seeing the chinese policy makers talk about providing liquidity and a means to rollover corporate debts thats taking the down side risk out of the markets. Its difficult to quantify that side of it but youre still in a deceleration phase of growth for china and its normally only one to two year afs that bottoms that you see the financial problems. Its a tremendous risk but good start. Do you think the prospect of easy money is encouraging firms to take on excessive risk in china. No, that phase already passed us. The chinese leaders made it clear that theyre not wanting to create and foster more of that environment Going Forward. I dont know. I still have my doubts. But well leave it there. Pleasure to have you on the show. Talked about everything. Lets move on to the run down. Tell you whats going to happen in todays trade. April Housing Starts are out at 8 30 a. M. Eastern. Theyre to rise sharply after they rose much less than expected in the month of march. Building permits are expected to rebound after they posted the biggest drop of last may of the previous month. Home depot reports earnings at the opening bell. We get results from Dicks Sporting Goods and tjx the parented of tj max marshals and home goods. After the close its about etsy which will be interesting because you tell me. They just went public. I know you go on there to buy me necklaces and earrings. The well perhaps, probably not. First Earnings Report since going public. Thats why its important. I was pretty skeptical of it. You were saying that ebay could do the same thing. Sure. I remember what you say. Well see what happens in the first earnings. Speaking of retail or the space, i want to point our attention to Urban Outfitters because a series of analysts are cutting their price target. Jp morgan from 34 to 50. We have them cutting their target to 36 from 43. This a day after First Quarter sales missed fraftds hit by heavy discounts. Same store sales rose for the first time. Overall they rose 4 but that was shy of expectations. Thats why youre seeing the stock move lower. Down 15 in germany. Ouch. Now take two interactivities Fourth Quarter profit rose as they were hurt by delaying launching grand theft auto 5. The net loss widened but excluding items easily beat analyst estimates. Also exceeding expectations and the company is launching a 10 million share buy back. Stake 2 rose 7 in after hours trade and its up a similar amount today in frankfurt. Still to come deal or no deal. European leaders at odds with athens over whether a debt agreement was within reach. We tell you more after the short break. Hort break. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. Welcome back. U. S. Futures point higher as the dow and s p try for a four day winning streak. The euro is on the slide after dovish comments from a board member and banks rush as banks weigh on margins in First Quarter earnings. The greek situation continues to get more interesting. This time its the austrian finance minister becoming the latest european leader to cast doubt on an imminent deal with athens saying he does not see an agreement in the next few days. This a day after greek finance minister insisted a default and return were not an option. However he said that athens would not reject any nonviable deals. There is no one in our government, no one, but no one in our government who will sign an agreement that wont forsee the restructuring of debt. Lets have a look at what this has done to greek bond yields this morning and weve seen an elevated bit of the yields. The ten year up and around 11. 6 or it was a few minutes ago. 11. 247onthe ten year at five year 16. 4 and three year 18. 3 . Lets bring in julia on set now. As ever mixed messages coming out on whether these negotiations are going well or not. Perhaps it seems like he is making progress but then people back home in greece dont want to go with him as much anymore. The first thing have to say is what you hear from them is going to be very different from what you hear to other finance ministers because theyre managing the situation as far as the people and the party back at home. We have seen a portion of the party saying we need to just throw off the creditors here. They are starting to approach some of the red lines as far as pensions are concerned but still nothing in there as far as the labor market and reform there is so i struggle to see still how we meet in the middle on this. And there was talks yesterday that the European Commission was trying to go behind their backs and negotiate a deal and it suggests even the creditors themselves arent on the same page of what they want at this stage. Very difficult for all parties to come together. I believe german chancellor Angela Merkel will be there. We know they have been speaking on the tone over the last coup of weeks. Thats not unusual. You have to hope that progress on some of the talks will be there but it comes down to the finance ministers and imf and commissioner of europe to try to bring these things together. So im not expecting any big announcement there is but you hope for more progress. Remind us of the key dates we have to think about when payments are due. Wraeyeah so the next payment is june 5th 2 3 hundred million euros. And based on what we saw, that does feel like a deadline. Obviously the greeks said by the end of this week they want a deal but we heard from the austrian finance minister there struggling. But that doesnt compare to the 7. 2 billion euros that needs to be unlocked in order for greece to solve many of its debt issues. Absolutely. We know they have virtually 1 billion euros less than that to push out to the ecb. In terms of the cash flows coming in and out theyre desperate for that money and more. This isnt a future deal. This is just finishing the last one. A fun summer ahead. A few more headlines until june 5th. So even if you hear the greeks talking about the end of the week were still not at that five minutes to the year midnight hour yet. Someone needs to make a movie on this. The greek drama at some point. Really. About the debt negotiations . Its not a classic. This political gamemenship taking place. Hes being sidelined but vocal. Who would you get to play him . He looks like a cross between bruce willis and tom cruise. Thats a good call. I have another one, pit bull. Pitbull. What about Angela Merkel . Meryl streep. Yeah, youre right and she played the iron lady as well. Margaret thatcher and Angela Merkel. George clooney should play mark carney. Thats a different movie. Well leave it there. Lets hope we dont have to make a movie out of this. Thank you so much. Still to come on Worldwide Exchange, what does it take to create a 100 year start up . We speak to the ceo of evernote about how hes aiming to keep the start up magic alive. Thats coming up after the break. The break. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the well equiped volvo xc60 today. Visit your local volvo showroom for details. Welcome back. Shares rallying at a 6 year high after apple said it would continue to buy maps from the firm. They have licensed the digital maps to apple since 2012 when it beat out google to supply built in maps for the tech giant. The stock up about 8. 8 . Now a company and ceo that aims to accomplish things on an epic scale. They want to be a 100 year start up by keeping the entrepreneur spirit alive. Good morning to you. Thank you for joining us. Before we kick off the tough question, give us a very quick overview of what evernote does. Were trying to redefine what product activity means. The way people want to grow has kept up. So you allow people to work from where ever they are and log into the same systems that companies are embracing and much more than perhaps the early types of technology than the consumer side. The old metaphor is maybe you write on microsoft word and talk about it in email. Were trying to make a unified experience so you can write and collaborate and discuss and research and share all in one place from your phone, your watch, your computer everything. Thats what i was going to say. Theres a variety of different platforms that as consumers were using to engage communicate and store information. Wearables becoming the next big gadget. How do you stay competitive in this market that has a variety of different platforms . You stay competitive the same way you always do. You try to make a really great product and not worry about what other companies are doing and spend all of your time trying to make something great but the biggest change in the world is the fact that we have this force field of Digital Intelligence surrounding us with many many devices and the way we use them has changed completely in the last five years. Do you think the traditional way of doing business of us coming in 95 to a set of offices having meetings face to face when you have to book meeting rooms is that all going to change . Are we going to work from home and log in from home and decide to work when we want to work . Theres bog to be big changes. There already are. Everything in life is going to become much more fluid. Most aspects of life including work have become shorter and more frequent. So we used to do work in very long sessions. Multiple hours in a single day now youre working hundreds of times a day from everywhere. Multiple devices. That pattern is repeated in just about every area and has a profound effect on the tools and products we use. What are they going to do to one day get the u. S. Consumer. On the flip side evernote actually has a massive following in emerging markets, particularly markets like japan. What was your secret . How did you gain penetration in these markets . We were lucky enough to be able to hire great teams in japan and china, and switzerland and russia and theres no secret other than having great people on the ground and making a good product. Ever note is used by the emerging class of knowledge workers. These are people whose fundamental happiness has everything to do with howell ganttly they can navigate the details of their life. These people want the same experiences. The way people use nit china is similar to the way people use it in turkey and the u. S. We have to get your thoughts on whats happening in Silicon Valley. These valuations suggesting were in a tech bubble. What are your thoughts . What are you seeing there. On the shortterm valuations are going to rise and fall and whether were in a bubble or not is hard to say. Were really going to try to step back and take a longterm view. Were trying to build something that will last and be more durable and last for 100 years. 100 year start up. In that time period theres going to be bubbles and bursts. In the shortterm view its very chaotic. Its chaotic now. Thats how you would characterize whats happening in Silicon Valley . Daytoday its always chaotic. Month to month it makes more sense and if you try to look a decade into the future you can see theres a huge amount of value left to be created. I want to ask about the apple watch. Evernote was one of the founding apps available on the apple watch. What can you do and how are the sales and use of the app going so far . The use of the app is going great. I dont have official numbers for watch sales but im watching the same source as everyone else is and i think its probably going really well. I had the apple watch now for about three weeks and it took a couple of days for it to sink into my brain and understand how powerful it was but now its essential to me. The thing to really understand is that theyre not apps specifically for the watch. The apple watch is the first generation of devices that allow apps to go across multiple devices. To give you an experience of using the same app on your watch and phone at the same time and as spoothmoothly as possible flowing back and forth between the two of them. Apps wont be for a particular single device. For a single human being across multiple devices. Any chances youre going to go public in the near future . Depends on what you mean by near future. We have maybe another year or two left to get our act together so we can really deserve to be a great public company. Well be waiting. Ceo at evernote. Thank you for joining us on Worldwide Exchange. Thank you. A quick look at u. S. Futures. Indicating a higher move after the rebound on wall street yesterday with the s p 500 and the dow closing at a record high. The dow with a higher move by 45 points. Were back in two minutes. Ck in two minutes. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount hi everyone. Youre watching Worldwide Exchange. Im seema mody. Im wilfred frost. Heres your headlines from around the world. The green back gaining more ground against the euro. Looking to extend a record run, u. S. Futures point higher as the dow and s p try for a four day winning streak. Banks rush to down fwradgrade Urban Outfitters. This as the street awaits walmart and home depot earnings before the bell. Finding the way. Tomtom shares rally after apple renew ace deal to buy digital maps from the dutch Navigation System firm. It was a record closing high for the s p 500 and the dow. It was the Technology Sector that also hit a new high powering the nasdaq as well as the s p 500. You can see futures indicating another day of gains. Well have to watch this board carefully to see what happens as we approach the opening of wall street at 9 30 a. M. Eastern. The dow up about 46 points in premarket trade. This as the dollar continues to strengthen against a basket of currencies. The euro right now extending its losses against the dollar. Right now at 1. 11. It was at a ten week high at 114 just last week. So a significant reversal in what were seeing in the euro dollar trade and today ecb seen as a key architect around the Bond Buying Program he provided reassuring comments on monetary easing and that is what traders are saying is helping the euro extend its decline against the u. S. Dollar. At 1. 11. Great for european equities. Particularly the exporters that do well in a weaker currency environment. The french markets extending its move to the upside as well. Well above the key psychological area we watch. Decision over the negotiations between greek leaders and International Creditors. We had that meeting later this week on where were expecting development to take place on the situation. Still a lot of confusion on whether we will get a deal. The greek equity market with a gain of around 3 . Just a quick look at the ftse 100. Were at 6,992. Falling into deflation, seeing a gain though none the less in the equity market by around. 3 . Thanks. Its a strong day for equities. Also a strong day for bonds. Of course once again underlining the fact that markets are very much driven by qe and whether we think it will surprise on the upside or the down side today we think it will surprise on the upside after ecb member said they would bring forward more of the bond purchases for may and june. Thats pushed the ten year yield in the german bund to. 56 and a week ago it was at. 7. And gilt is at 1. 88 having been above 2 last week. It may have been another record close for the s p 500 and dow but bank of America Meryl lynch is predicting a bleak summer for stocks. Analysts suggest the investors will be trapped over the coming months in a twilight zone. The transition period between the end of qe and the first fed rate hikes. That means mediocre returns and break downs and plashflash crashes. Whats the best protection from your portfolio. The bank advises adding cash and gold to your portfolio. And positioning against a stronger dollar. Now interesting that they mention gold because its many times seen as a safe haven asset during times of higher volatility but gold has been that we vn been seeing the big rally that we see in gold when we are in a rising rate environment or when we see elevated volatility in the equity market. Absolutely. I think, you know the other problem for gold has been the fact that with treasury yields at relatively positive levels to where they were at the peek of quantitative easing in the u. S. Where do people want to buy gold right now and the dynamic is leaning toward oversupply for gold. Were seeing that demand is declining in those markets. Thats another reason gold is not rallying as we typically see it. Indeed. It does pose the question that if gold is not a great buy at this moment whats the best way to protect your portfolio . Theres complicated put spreads that that note suggests but the traditional idea if you buy bonds for protection instead it doesnt apply at the moment. Theyre highly correlated in terms of price but weve seen with pries of bonds and prices of equities coming up that theyre not finding protection against one another and it makes it hard to decide how to protect your portfolio when you see volatility is coming. Everything is subject tie sell off. These high dividend paying sectors typically out perform when looking for safety but theres an expectation that a fed rate hike will come in september or december and investors have been repositioning themselves and getting out of the sectors. Utilitys is the worst performing sector in 2015 after being the best performing sector in 2014. We call this many times the darling to dog trend. Being the best performer but next year underperforming as investors reallocate their portfolio into growth sectors. Technology hitting a 15 year high, the tech sector. Bear in mind that were hitting all time highs again with u. S. Equities. To take it no stock. Quite record closes. But these are high level with no fundamental reason for it. We have to move on. Lets talk about the top stories. The st. Louis fed confirmed part or of the website were hacked last month. The bank says users that may have been seeking Economic Data and research were redirected to fake pages. They may have been subject to malware and fishing attacks. They include the files as well as stats and geographical maps. Investment banks are raising their starting salaries for College Grads for the first time in five years according to the new york times. Its risen to 85,000 after hovering near 75,000 since the start of the decade. Interesting. All right. Coming up on Worldwide Exchange starbucks may have given up on selling cds in the stores but the coffee giant is not giving up on music. Details on the companys new play list is coming up next. Ist is coming up next. European equities are firmly in the green and auto stocks among the best performers here in europe as fresh data showed regional car sales rising for the 20th straight month. April new car registrations were up nearly 7 across the euro zone. Fiat chrysler as sales outpace the rest of the European Market up nearly 14 from the same month last year. In response auto stocks in the green. Up 2. 6 . Folks wagon in germany. Renault up about 3. 5 . Auto showing a lot of leadership. You got it. Youre making fun of the fact that i typically cant pronounce this one. You nailed that one. Thats about right. If you had to buy a european car what brand would you go for . I would stick with bmw or per ferrari. But first you have to pass your u. K. Driving test. Not likely at the moment. Lets move on. Starbucks is taking another stab at the music business teaming up with spotify. Landon has more from cnbchq. Starbucks is partnering with spotify in a multiyear deal from a new online music service. They have a say in the specially cure rated play list. Customers can use the starbucks mobile app to make song suggestions and will be able to listen to the music at home or elsewhere through either the starbucks or spot identify apps. They will also be able to earn points in starbucks Customer Loyalty program. The first time they have been available outside of the companys stores. They may use this as incentive to attract new subscribers. This is part of his efforts to use Digital Initiatives to stir growth earlier this year. He named Kevin Johnson as his right hand man as president and coo. It first started selling cds in the 1990s and launched a music label by signing Paul Mccartney but none of those efforts survived and starbucks stopped selling cds in stores in march. Theyll role out the service this fall in the u. S. Followed by canada and the u. K. It will get premium subscriptions allowing baristas to create play lists for their stores but only about a quarter paid for the premium add free verse. It plans to launch a dedicated starbucks section on its sight. Streaming music continues to gain momentum. It rose 45 last year and digital downloads dropped by 12 . Back to you. Thank you for that. Seema do you use spotify a lot . I use a variety. Youtube. It just depends. I still outright buy. Youre like a young man but youre actually in the body of a young man but the mind of an old man. I went and paid 99 for it on itunes. You like taylor swift but i hear she is taken now. Moving on, tom tom shares rally after a six year high after apple announced it would continue to buy digital maps from the dutch Navigation Systems firm. Details of the deal were not released. Tom tom licensed its digital maps to apple since 2012 when it beat out google to supply built in maps. Go on. I did it. Tomtom up 9. 8 . Now it took six is years in the white house but president obama finally joined twitter on monday. He already has more than 1. 5 million followers. Obama received a welcome message from former president bill clinton and that lead to this interesting exchange. Clinton said welcome to twitter potus. One question does that user name stay with the office . Asking for a friend. Obama replies, good question the handle comes with the house. Do you know anyone interested in flotus. A pretty Good Exchange between two president s and a former president. Following that Brilliant Exchange between president of the United States and bill clinton we have been asking you whats the best first tweet you have ever seen . Join the conversation here and our personal handles on the green as well. We mentioned a couple of good ones from conan obrien and piers morgan. Very witty from the Central Intelligence agency if it was them. Oprah winfrey said thank you for a warm welcome, feeling really 21st century this morning which i like as well from an older generation embracing twitter. This exchange between former p and current president goes to show that twitter is still a powerful platform used to communicate. Investors give twitter a hard time given the disappointing earnings we have been seeing but clearly its still seen as the platform in the social media, you know environment to communicate. We saw that selfie from premiere league. But to bill clintons credit i didnt follow him before today. He has a lot of very witty and amusing tweets throughout his history. So i remember following president clinton. If youre watching and you want to recommend back to follow seema and myself wed be most welcome. You need some followers. I was trying to go down to see my first tweet but i couldnt get there. I have tweeted 6,431 tweets over the last three years. That would take too much time to get to the first tweet. And all 6,431 of them golddust. The type of witt that comes from this brain of mine. Absolutely. Anyway. Were going to continue discussing twitter but before we get to the break here are the headlines you need to know this morning. U. S. Futures pointing higher as the dow and s p try for a four day winning streak. The euro is on the slide after dovish commentary from an ecb board member. Banks rush to downgrade Urban Outfitters. The stock down 15 in germany. Were back in two minutes. E back in two minutes. Jp morgan among several investing banks downgrading Urban Outfitters. This a day after the fashion retailer posted First Quarter sales below forecasts hit on heavy discounts. Aim store sales at its anthropologie brand was hurt by increased competition from h m and forever 21. Shares fell 15 in after hours trade in the u. S. Down 15. 8 in germany today. Now walmart does kick off a busy week for retail earnings with home depot and tjx also reporting today. Wednesday we hear from lows, target, and limited brands. Thursday we turn our attention to gap, best buy, william sonoma. Theyll be reporting earnings. This follows a disappointing week for the u. S. Sector as total u. S. Retail sales for april came in flat following a dismal 0. 2 dip in march largely blamed on bad weather. The first round of q1 earnings last week also worried investors with macys disappointing results. Kohls which managed to beat on earnings per share missed on q1 sales. So lackluster season for the retail sector. What can we expect from walmart which rorts beforeeports before the opening bell. Lets bring in stacy joining us here from new york. Great to see you this morning. Help us understand what are you expecting from walmart . The big retailer . We have seen a slue of really disapointing retail earnings but wall street is looking for a one to two comp this morning. Thats probably at the low end here. Walmart made it clear that this is a year of really no sales growth and noern earnings growth. This is a year theyre spending spending spending in order to get up to speed on ecommerce and also dont forget about the wage increases were talking about this year for retailers across the board. If those Sales Numbers dont come in watch out for the bottom line. Lets talk about their spending in particular on ecommerce because theyre chasing after amazon with their own offering on that front, arent they . Absolutely. They talked about this week launching a test prime service similar to amazon but cheaper and no streaming service with it. Really the deal is that almost half of their customers online atwal mart are prime amazon members. They need to get out there and ramp up their penetration. Theyre only low Single Digits online versus the rest of retail which is high Single Digits to low double. Theyre behind and need to catch up and that costs a lot of money to do so. I was going to ask in general the retail sales data we have seen and individual earnings from companies, is that put to bed the idea that when the Oil Price Falls we get to see a big boost in Consumer Spending . Yes, unfortunately the theme is when gas prices started falling in november you know the street got so excited. This is it. Retail is going to take off and this is the savior here. It didnt pan out. People are saving more and theyre paying down debt and when we talk about these wage hikes the second half of the year t streets running with this theme again expecting that spending to flow through. Im not sure its going to and again if it doesnt flow through watch out for retailers because they got to pay for these wage hikes. I want to get your thoughts on a little bit of a fashion trend. You may have noticed the overalls on our wall. Thats because overalls have been making a come back. Reportedly among the biggest trends this summer. I have noticed that. Hold on overalls, we havent got overalls. Im sorry. Theyre dungaries. Thats what you call them . Right . I cant see your photo but i think we call them overalls. Since when . Is that what they use here in britain . Thats what theyre called here. Translation effect. Is this a trend were going to see in the fashion world . Is this going to be a big opportunity for Companies Like top shop among others . Yeah we started to see them show up in stores over the last year. Theyre on serious discount. You saw the Urban Outfitters numbers last night. A lot are talking about the denim trend which is has been really challenging for years here for lack of fashion trend. Im not so sure the overall trend is going to save us. Neither am i. It looks cute on some of us but not all of us. Thank you for joining us. Ill tell you what might boost sales of overalls is if they call them dungaries but thats all we have time for today on Worldwide Exchange. Its been a pleasure as ever. Im wilfred frost. Im seema mody. Next up is squawk box. Thank you for joining us today. R joining us today. Soaring more than 3 overnight. The biggest one day gain there in four months. European shares also up sharply in early trading while the euro is dropping on ecb comments. U. S. Equity futures pointing to more gains at home. Starbucks and spotify teaming up. Among the perks now coffee chain customers will be able to influence songs played when theyre grabbing a frappichino. Plus how fit is your hometown . Which u. S. Cities are the most active . Washington d. C. Leads the pack while minneapolis needs work. Its tuesday may 19th. But anyway squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Good morning and welcome to squawk box on cnbc. Social media is buzzing about a new twitter user today. President obama. This is his first post on a new account for him at potus. He writes hello twitter its barrack. Really, six years in theyre finally giving me my own account. But former president bill clinton had fun with it. Welcome to twitter potus. Does t